diff --git a/pyproject.toml b/pyproject.toml
index 3745868..3999766 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -1,6 +1,6 @@
 [project]
 name = "uipath-mcp"
-version = "0.0.86"
+version = "0.0.87"
 description = "UiPath MCP SDK"
 readme = { file = "README.md", content-type = "text/markdown" }
 requires-python = ">=3.10"
diff --git a/src/uipath_mcp/_cli/_runtime/_runtime.py b/src/uipath_mcp/_cli/_runtime/_runtime.py
index ddd67f8..83d513c 100644
--- a/src/uipath_mcp/_cli/_runtime/_runtime.py
+++ b/src/uipath_mcp/_cli/_runtime/_runtime.py
@@ -64,7 +64,7 @@ async def execute(self) -> Optional[UiPathRuntimeResult]:
         try:
             if self._server is None:
                 return None
-            
+
             self.trace_provider = TracerProvider()
             trace.set_tracer_provider(self.trace_provider)
             self.trace_provider.add_span_processor(
@@ -262,13 +262,21 @@ async def _register(self) -> None:
         initialization_successful = False
         tools_result = None
         server_stderr_output = ""
+        env_vars = self._server.env
+
+        # if server is Local, include environment variables
+        if self.server_type is UiPathServerType.Local:
+            for name, value in os.environ.items():
+                # config env variables should have precedence over system ones
+                if name not in env_vars:
+                    env_vars[name] = value
 
         try:
             # Create a temporary session to get tools
             server_params = StdioServerParameters(
                 command=self._server.command,
                 args=self._server.args,
-                env=self._server.env,
+                env=env_vars,
             )
 
             # Start a temporary stdio client to get tools
diff --git a/uv.lock b/uv.lock
index cdbdc94..0e094c7 100644
--- a/uv.lock
+++ b/uv.lock
@@ -1989,7 +1989,7 @@ wheels = [
 
 [[package]]
 name = "uipath-mcp"
-version = "0.0.84"
+version = "0.0.87"
 source = { editable = "." }
 dependencies = [
     { name = "mcp" },
@@ -2012,7 +2012,7 @@ dev = [
 requires-dist = [
     { name = "mcp", specifier = "==1.9.0" },
     { name = "pysignalr", specifier = "==1.3.0" },
-    { name = "uipath", specifier = ">=2.0.56" },
+    { name = "uipath", specifier = ">=2.0.59" },
 ]
 
 [package.metadata.requires-dev]